【By Observer Net, Qi Qian】According to a report by Bloomberg on September 8, the U.S. government is stepping back and proposing that the export of chip manufacturing equipment to Samsung Electronics and SK Hynix's factories in China be subject to annual approval.

Although the U.S. and South Korea have just signed a trade agreement, in recent times, South Korean companies have been continuously hit by the U.S. government. Recently, the U.S. revoked the exemptions for Samsung and SK Hynix's Chinese factories. Last week, the U.S. government arrested 475 workers at a Hyundai Motor factory in Georgia, accusing them of being "illegal immigrants," among whom about 300 were South Korean citizens.

According to insiders, last week, officials from the U.S. Department of Commerce proposed the idea of "on-site licenses" to replace the indefinite authorization that chip manufacturers received under the Biden administration. It is reported that the Trump team proposed that Samsung Electronics and SK Hynix receive an annual export exemption, including restricted equipment, parts, and materials, and specify the exact quantity.

Previously, Samsung and SK Hynix enjoyed full and fast export privileges due to their "Verified End-User" (VEU) status. However, after the U.S. government revoked the exemption, this privilege will take effect after 120 days.

According to insiders, the relevant discussions are still ongoing, and no final decision has been made yet.

Bloomberg believes that this introduces more regulatory steps but ensures the continuity of operations, aiming to prevent disruption in the global electronics industry. U.S. officials said they do not want to disrupt the operations of South Korean companies in China, but they will not approve the export of equipment used for upgrading or expanding these factories.

According to these insiders, the latest proposal from the U.S. has triggered complex reactions in South Korea: on one hand, the South Korean industrial sector and government officials feel relieved; but at the same time, they are frustrated by the additional burden from the Trump administration.

Samsung Electronics factory, photo

The White House and the U.S. Department of Commerce have not responded to requests for comment. Reuters reprinted the report, but also stated that it could not verify the content.

Bloomberg stated that Samsung and the South Korean Ministry of Trade, Industry and Energy spokesperson declined to comment. SK Hynix responded that they would "maintain close communication with the South Korean and U.S. governments and take necessary measures to minimize the impact."

According to reports, U.S. government officials have long viewed the VEU system as a "loophole in the Biden administration," concerned about "technology leakage or equipment being transferred to Chinese companies." A source said that overall, the Trump team wants to gain more insight into the supply situation of South Korean chip manufacturers' factories, and shipments can only be approved if Washington initiates the process.

However, former U.S. officials rebutted, stating that Samsung and SK Hynix have already made substantial security assurances in their VEU designations.

At the same time, the U.S. proposal's annual review mechanism has institutional problems. One U.S. official stated in a federal notice that revoking the exemptions for Samsung and SK Hynix would require them to process an additional 1,000 licenses each year. In addition, South Korean companies said they find it difficult to accurately predict which parts they might need to repair production equipment that could fail at any time within 12 months.

Data shows that South Korean chip manufacturers rely on their Chinese factories, Bloomberg chart

On August 29, the U.S. Department of Commerce issued a notice announcing that it would revoke the exemptions for South Korean chip manufacturers Samsung and SK Hynix for using U.S. equipment at their Chinese factories, making it harder for the two companies to produce chips in China. The restrictions will take effect after 120 days. Soon after, TSMC stated that its exemption was also revoked.

The Department of Commerce spokesperson said on August 30 that semiconductors are a highly globalized industry. After decades of development, an interdependent industrial structure has formed, which is the result of market rules and corporate choices. This move by the U.S. is self-serving, using export controls as a tool, which will have significant adverse effects on the stability of the global semiconductor industry chain and supply chain, and China opposes this. The spokesperson emphasized that China urges the U.S. to immediately correct its wrong approach and maintain the safety and stability of the global industrial chain and supply chain. China will take necessary measures to resolutely protect the legitimate rights and interests of enterprises.

On September 5, the U.S. Department of Homeland Security stated that Immigration and Customs Enforcement (ICE) agents arrested 475 workers at a Hyundai Motor factory in Georgia, of whom approximately 300 were South Korean citizens. The U.S. claimed that these people were "illegal immigrants."

Bloomberg and Reuters mentioned that these changes occurred shortly after the U.S. and South Korea had just reached a trade agreement, and South Korean President Yoon Suk-yeol visited the U.S., pledging increased investment in the U.S. The report suggests that the U.S.'s actions against South Korean companies have intensified tensions between the two countries, "again pushing South Korea between its most important ally (the U.S.) and its largest trading partner (China)."

A professor at Soongsil University in Seoul said, given the current situation, "most South Korean companies and people would feel betrayed," because South Korea had just made its most beautiful investment pledge. He pointed out, "It's even hard to imagine what will happen tomorrow. We are in an era full of uncertainty, and the concept of allies has changed."

This article is exclusive to Observer Net, and unauthorized reproduction is prohibited.

Original: https://www.toutiao.com/article/7547876992226525731/

Statement: The article represents the views of the author and is welcome to express your opinion through the 【top/down】 buttons below.